If there are externalities present in a market, resources are allocated efficiently when marginal social cost equals marginal social benefit.

Name: If there are externalities present in a market, resources are allocated efficiently when marginal social cost equals marginal social benefit.
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Externalities cause a divergence between private and social costs/benefits. Efficient allocation occurs when marginal social cost equals marginal social benefit, accounting for these externalities.

If There Are Externalities Present in a Market, Resources Are